High street sales enjoy ‘encouraging’ rise

By GARETH MACKIE
Published on 05/02/2013 00:00

HIGH street retailers have enjoyed an “encouraging” start to the new year, with last month’s sales rising at their fastest pace since December 2011 despite much of the country being hit by heavy snowfall.

However, there was little cheer for the UK’s construction sector, which saw output fall for the third month in a row following a drop in civil engineering work.

According to today’s report from the British Retail Consortium (BRC) and KPMG, like-for-like sales rose 1.9 per cent in January – the strongest increase for 13 months – as shoppers snapped up gadgets such as smartphones and tablet computers.

BRC director-general Helen Dickinson said that, while sales suffered during the cold snap, the effect was short-lived and failed to cancel out the positive showing across the month.

Although the poor weather gave footwear sales a “boots boost”, the wider clothing sector suffered its worst performance in 14 months as shoppers turned to supermarkets at the expense of high street retailers’ spring and summer collections.

This year has already witnessed a number of high-profile casualties, but KPMG’s head of retail David McCorquodale said there were “reasons to be cheerful” at the start of what is likely to be a tough year.

He added: “While technology advances may have hastened the demise of HMV, Blockbuster and Jessops, many retailers will look back at the last two months with pride after implementing successful seasonal campaigns.”

Howard Archer, chief UK and European economist at IHS Global Insight, said the strong retail figures will boost hopes that the UK can avoid a triple-dip recession, but he said the construction sector’s problems “are far from over”.

The latest Markit/Cips purchasing managers’ index showed activity fell for the third month running in January as the snow compounded the difficult economic conditions.

However, the rate of decline was unchanged compared with December and optimism among builders is improving, leading to the first increase in employment across the sector since September.